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NVIDIA Makes Headway in Automotive Space With Drive AutoPilot

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NVIDIA (NVDA - Free Report) unveiled the world’s first commercially available Level 2+ automated driving system — Drive AutoPilot — at the ongoing Customer Electronics Show (CES) held in Las Vegas.

Per the company, Drive AutoPilot by “integrating multiple breakthrough AI technologies” will help automakers bring more advanced driving features into their self-driving vehicles.

The platform is powered by NVDIA’s Xavier system-on-a-chip processors and the latest Drive software for processing data from sensors outside the vehicle and inside the cabin.

NVIDIA asserts that Drive AutoPilot will be able to address the limitations of existing Level 2 advanced driver assist systems (ADAS), which include "inconsistent vehicle detections and poor ability to stay within lanes on curvy or hilly roads", according to a recent study.

Notably, the technology will add greater capabilities such as highway merge, lane change or lane split and personal mapping to the existing ADAS. Further, driver monitoring, AI copilot skills and sophisticated in-cabin visualization of the vehicle’s computer vision system will be included.

The chipmaker mentioned that Drive AutoPilot, a key component of the NVIDIA Drive platform, already has two customers. Notably, it will be used by German automotive suppliers, namely Continental and ZF in Level 2+ driverless systems with production beginning in 2020.

What it Holds for NVIDIA

NVIDIA’s steady focus on developing more updated AI technologies for self-directed cars is making it well poised to become a leading provider of technology for autonomous vehicles. The company is already helming the market in this space, outclassing other competitors, such as Intel Corp. (INTC - Free Report) and Advanced Micro Devices (AMD - Free Report) in terms of growth.

Per MarketsandMarkets, the ADAS market is projected to reach $91.83 billion by 2025, reflecting a CAGR of 20.96% between 2018 and 2025.

According to data available from BI intelligence, 10 million automated cars will hit the road by 2020. Per Statista, the market for fully autonomous modes of conveyance will be valued at roughly $6 billion while that of the partially autonomous ones will rake in $36 billion by 2025.

Going by Boston Consulting Group estimates, the autonomous car market will be worth $42 billion by 2025 and $77 billion by 2035. These projections encourage us about NVIDIA’s growth prospects in the space.

Furthermore, by expanding its business avenues, the company will be able to curb its reliance on the PC industry, which is currently lying dormant.

Zacks Rank and Stock to Consider

Currently, NVIDIA has a Zacks Rank #5 (Strong Sell).

A better-ranked stock in the broader Computer and Technology sector is Synopsys, Inc. (SNPS - Free Report) sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Synopsys is projected to be 10%.

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